Guest Post: What I Would Teach My 6-Year Old about Financial Freedom?

Today I have the pleasure of presenting a guest post from Joseph Hogue from MyWorkFromHomeMoney, a blog site dedicated to detailing the various avenues available to making money whilst staying at home rather being an office rat.

Joseph initially reached to me for a guest post a month ago, which I agreed. I then checked out his site and realised that we could all learn a thing or two from his financial independence journey. So I asked him to write me something. Given that I just had my firstborn, I thought something around teaching FIRE to a 5-year-old would be appropriate. Joseph haggled with me and we decided to settle on 6.

I always believe that we learn best by standing on the shoulders of giants and who better to absorb tons of FIRE wisdom from than a man who has actually achieved it!

Without further ado, I’d like to present:

What I Would Teach My 6-Year Old about Financial Freedom?

By Joseph Hogue fromMyWorkFromHomeMoney

Financial freedom means something different to everyone and it may not be what you expected

Hindsight doesn’t always have to be a lesson in regret. Rather than looking back on what we should have done, using those lessons to teach others can help to make the mistakes worth it.

Besides some great investing lessons, that’s the message I got from CJ’s article on investing lessons he should have learned in his teens and it got me thinking about what I can be teaching my six-year-old son.

Michael is still young but starting to ask those money questions I think every parent dreads.

We’re taught almost nothing about personal finance in school so it’s not surprising to see that most money lessons have to come from experience.

One of the most important lessons I’d like to teach my son is how I learned about financial freedom. Not the definition of the term or reading about it on a blog, but the realization of what it really meant to me and how that has made a huge difference in my life.

You see, like so many great money lessons, those I’ve learned about financial freedom started with a mistake.

My First Money Mistake

I was just out of college with my shiny new finance degree and ready to tackle the world of corporate finance. I landed a job as a financial analyst for a large reinsurance company and was glad to get it.

Yeah, that lasted all of about three months.

I hated my job. I stared at the same spreadsheets every day. Going blind on the credits and debits in each account, I felt like poor Bob Cratchit hunched over his accounting in Scrooge’s workshop.

In 2004, the Financial Independence, Retire Early (FIRE) movement was just becoming mainstream and all I could think about was saving as much money as possible so I never had to work again. It was a stretch for the 25-year-old me but I was willing to bust my tail to do it.

I worked two jobs, saved every penny and invested everything into stocks. I went back to my frugal college days of eating Ramen noodles and rarely went out.

The problem was that I would burn out on this lifestyle every six months and go on a spending spree, setting myself back a step for every two.

My bank account was going nowhere.

I eventually made more realistic goals with the help of a friend and realized I was aiming at the wrong idea of financial freedom anyway. It wasn’t until I started creating my online business that I discovered I had it all wrong, and learned two valuable lessons about financial independence.

Financial Freedom Lesson #1: It’s not JUST about having a lot of money

My singular goal during that first job was to save enough money that I would never have to work again. The problem was…I gave no thought to what I would do if I could retire.

I guess I could have sat around the house and watched The Simpsons.

There’s a reason death rates jump for people during the first five years of early retirement, they die of boredom!

The most important thing I’ve learned about financial freedom is that it isn’t about not working, it’s about not having to worry about a paycheck while you’re working.

I started building my online businesses in 2012 but didn’t start making much money until years later. I loved the feeling of creating these online assets and sharing what I had learned about personal finance but it just didn’t pay the bills.

In fact, it wasn’t until 2015 that I was making as much online as I had in a traditional job, but I had saved enough after learning my first money lesson that I could switch to full-time working from home before the online income was sufficient to pay the bills.

The irony is, I now work more than I ever did at a 9-to-5. I love growing my online business. I still save for retirement but can’t think of a life where I don’t do this at least a little each week.

Financial freedom for me wasn’t quitting work, it was being able to find the work I loved and not worry about the money.

Financial Freedom Lesson #2: Freedom is not worrying about emergency spending

Two-in-five households report not being able to cover a $400 unexpected expense. That emergency expense can come from anywhere, from car repairs to healthcare.

Even for those that are saving for their future, the tragedy is that one catastrophic expense can wipe out a lifetime of saving and investing. I saw cancer completely wipe out the savings of two parents at separate times.

As I get older and finances revolve around providing for my family rather than how much I have to go out on Friday night, financial freedom becomes about not having to worry about these catastrophic expenses that can send you into a spiral of debt.

That means not only having enough savings and insurance to cover unexpected expenses, but having some passive income sources that can generate income even if I can’t work for a while.

While our son is still a little young to make any real money, we’ve started him on chores around the house and learning what it means to work. When he’s a little older, I’ll start talking to him about starting his own side-hustle projects.

Wrap up

These are certainly not the only lessons to financial freedom I’d like to pass on to my son. The truth is that financial freedom means different things to different people. The sooner he can find his own definition, preferably without making the same mistakes, the better off he’ll be.

Joseph Hogue worked as an equity analyst and an economist before realizing being rich is no substitute for being happy. He now runs four websites and a YouTube channel on beating debt, making more money and making your money work for you. A veteran of the Marine Corps, he now makes more money than he ever did at a 9-to-5 job and loves building his work from home business.